Amex Expands Reach Into Financial Services With Digital Checking Accounts

There may be no financial services product quite as universal as the checking account.

Liz Bergman, VP of digital checking and debit product management at American Express, told PYMNTS in an interview that the digital age demands checking accounts that move well beyond simple withdrawals and deposits.

The conversation came as American Express on Tuesday (Feb. 8) launched its first all-digital consumer checking offering.

Key to the appeal, she said, is an annual percentage yield (APY) that is 10 times the current market rate — and now stands at 50 basis points. Amex also joins a growing list of banks offering customers points, long the sole domain of credit cards, for using their checking accounts. Account holders will be able to earn rewards points on eligible purchases.

A Growing Shift to Debit Cards

Bergman noted that the launch of the digital checking account is a natural extension of Amex’s consumer efforts, with other deposit products like savings accounts and certificates of deposit.

Debit, of course, remains a favored payment mechanism. Recent PYMNTS data shows that overall, 37% of consumers use debit to pay for purchases. Additionally, as Bergman said, debit is proving especially popular with Generation Z and millennial consumers — as many as 80% of them use debit in place of cash.

See also: Consumers Typically Use Debit Cards to Pay In-Store, Credit Online

Bergman noted that the launch comes as consumers continue to embrace digital banking, and Amex has been receiving request from members to introduce more banking products.

Even as consumers continue to bring more of their daily activities online, they don’t want to make tradeoffs, Bergman said, and they seek value in higher yields and rewards. Amex’s checking account is a bid to expand its membership — or as she said, “membership is the platform, and this is just the next phase of our journey.”

Amex will first market digital checking to its existing card members, but the company contends that the accounts have broad enough appeal to pique the interest of potential new members.

“If you have a credit card with membership reward points, when you earn membership rewards points on the debit card, all those points are ‘pooled’ in the same place, and with debit, these consumers now have increased options in managing their broader financial lives,” Bergman said.